Norwegian power investor cites transparency in RP privatization

Published by rudy Date posted on January 11, 2008

Norway’s SN Power, a partner of the Aboitiz Group in several biddings for National Power Corp. (Napocor) generating assets, said the government, through the Power Sector Assets and Liabilities Management Corp. (PSALM), has shown complete transparency and fairness in its privatization program.

PSALM is created under the Electric Power Industry Reform Act (EPIRA) to oversee the disposal of Napocor’s generation and transmission assets, including its contracts with independent power producers (IPPs).

SN Power made this pronouncement amid allegations that PSALM had favored an influential businessman close to President Arroyo on the sale of the multibillion-dollar National Transmission Corp.(TransCo), one of the government’s largest energy assets.

“We have found PSALM to be very professional, fair and balanced in its drive to protect government interest in the transaction while openly and fairly adapting the transaction documents to satisfy the complex requirements of international investors and their financiers,” SN Power chief executive officer Oistein Andresen said in his letter to President Arroyo.

SN Power is a Norwegian industrial investment company whose interests include investing in renewable energy assets in Latin America, Africa and Asia, including the Philippines.

The company is jointly owned by the Norwegian Development Fund and Statkraft, Europe’s largest renewable power company. Both Norfund and Statkraft are 100-percent owned by the Norwegian government.

Together with its local partner Aboitiz Power Corp, SN Power has been heavily involved in the privatization of Napocor assets since 2005.

SN Power had tendered bids in three big power projects, but won only in two: Magat in Isabela and Ambuklao and Binga in Benguet. It lost in the Pantabangan and Masiway project in Nueva Ecija.

In October, SN Power refinanced and fully paid for the Magat plant after initially availing of PSALM’s credit facility.

The SN Power executive said his company never had any problems dealing with PSALM top management as well as its other team members.

“The transparent nature of the bid processes has been, and continues to be a critically important factor in our continuing interest in investing in the Philippines, and participating in the future sale of the Napocor assets both in Luzon and in Mindanao,” he added.

Through its charter, SN Power, said Andresen, “invests only in developing countries, abiding by strict rules of conduct, and only in projects contributing to the positive economic and social development of the (host) countries.”

TransCo has been described as one of the government’s “crown jewels.” With TransCo’s power transmission grid and fiber optic cables, the winner of the auction could also become a powerful player in the telecommunications industry with its own broadband backbone network.

Andresen said SN Power also noted with “significant interest the recent successful participation” of the US-based AES Power Corp. in the plans to expand the Masinloc coal-fired power plant in Zambales to double its present capacity, and the Belgium-based Suez Tractebel’s successful bid for Calaca, another coal-powered plant, in Batangas.

Both large and very capable companies, AES and Suez, he added, have a long history of competing internationally, participating in international bids as well as being involved in a deregulated power industry.

Andresen said this involvement bodes well for both the past and future bid process, as well as the future of the Philippine power market, already one of the most deregulated power markets in the developing world.–Donnabelle L. Gatdula, Philippine Star

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